Credit, collections & insolvency news

Irish bank KBC has sold loans to credit-servicing and debt-collection firm Cabot Financial Ireland. The sale of the KBC portfolio is understood to involve more than 100 loans – most of which related to buy-to-let properties that have been sold – with money is still owned on the original mortgages.

The sale comes weeks before the Belgian-owned lender is due to make a decision on whether to exit the Irish market. The call by its Belgian parent on whether to stick with KBC Ireland, and possibly ramp up the brand, or exit the now profitable business will be announced along with its financial results on February 9, the bank. The move to sell – the first time KBC Ireland has sold loans – has prompted fears about the future of the bank. It comes after a renewed focus on the sale of mortgages across the banking system to vulture funds.

David Hall of the Irish Mortgage Brokers Association said the sale of the loans was causing fear among borrowers, and raised questions about the future of the bank here. “It also points to the fact that no-one should hand back the keys of a home until they have a deal on the residual debt owed,”

The general secretary of the Financial Services Union, Larry Broderick, said: “This uncertainty cannot be allowed to hang over bank staff for the next month. It is not clear if the bank would retain its operations as they are in this country. The bank could also decide to merge with another bank, or sell it on.”